By George Glover

Chamath Palihapitiya, the self-titled SPAC king who launched a flurry of blank-check entities after the Covid-19 pandemic, is back -- with a chilling warning for the market.

"There can be no crying in the casino," Palihapitiya's Social Capital said in a filing for a new special purpose acquisition company, or SPAC, late Monday, reminding retail investors of the risks associated with gambling on these types of assets.

The SPAC will seek to merge or buy an energy, artificial intelligence, decentralized finance, or defense company.

SPACs are listed investment vehicles that try to buy privately held companies to give them a backdoor route to stock markets without having to hold an initial public offering. Social Capital SPACs have taken the likes of space tourism company Virgin Galactic and real-estate developer Opendoor Technologies public in the past.

Ukraine's largest mobile operator, Kyivstar Group, went public on Friday via a SPAC merger. Its shares, which trade under the ticker KYIV and surged 17% on Monday, were up another 9.2% in Tuesday's premarket as investors bet that President Donald Trump's flurry of meetings with world leaders could lead to a peace deal ending the war in Ukraine.

But if SPACs are back, that's probably another sign of market exuberance.

Wall Street is convinced the Federal Reserve will start slashing interest rates next month -- traders think there's an 83% chance of a September rate cut according to the CME FedWatch tool -- and that's sent investors piling into meme stocks, buzzy initial public offerings, and crypto treasurers.

History suggests it's a time to be cautious. The same speculative assets boomed straight after the pandemic -- marking the top of the so-called everything bubble, which burst as soon as the Fed started hiking rates in early 2022.

Write to George Glover at george.glover@dowjones.com

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August 19, 2025 07:56 ET (11:56 GMT)

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